KATHMANDU, June 14: SN Power, which is developing Tamakoshi III (650 MW) hydropower project, has started looking for potential clients after the government declined to ensure market for the energy generated by the Dolakha-based project.
“The Norwegian power developer has started negotiation with the Nepal Electricity Authority (NEA) after the Investment Board Nepal (IBN) said that that the government wouldn´t provide sovereign guarantee for the project,” a source privy to the development told Republica.
The IBN and SN Power held first round of power development agreement (PDA) negotiation for Tamakoshi III a couple of weeks ago.
Meanwhile, the SN Power is also working on exploring potential clients in India to sell generated by the project as some Norwegian firms are involved in development of transmission lines in India, the source further revealed.
However, the SN Power is pushing to get sovereign guarantee for the project as it would not be able to export energy to India because of the absence of sufficient cross-border transmission lines.
“The issue of power trade agreement (PTA) between Nepal and India becomes crucial here,” a government official involved in the PDA negotiation with the SN Power shared.
The IBN has said that it would also try to find out potential client for the energy that the project will generate.
“But, IBN has made clear that it would not be able to guarantee anything that is related to power purchase agreement (PPA) with the NEA,” the official said. “NEA is an autonomous body and IBN can not push for anything.”
The NEA has said that it would buy the energy in dry season. “The state-owned power monopoly, however, has denied to purchase power during wet season, arguing that its project would generate sufficient energy during west season,” the source revealed.
According to the source, IBN and SN Power would sit for another round of PDA negotiation after the latter finds buyer for energy generated by the project.
The SN Power has already signed the power negotiation agreement (PNA) with the IBN. The PNA document binds developer to complete PDA negotiation with the authority concerned within 18 months of the signing of PNA.
The SN Power and IBN signed PNA more than a month ago.
Source : Republica